Jacinta Collins (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Superannuation and Corporate Law, Senator Sherry, representing the Minister for Finance and Deregulation. Can the minister please update the Senate on any ongoing threats to the government’s budget surplus and on whether there have been any new developments with these threats?

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

It is important to update the Senate and the Australian public on the daily threats to the budget surplus. The Labor government will build a strong budget surplus of some $22 billion in the next year to fight inflation. It is very important to fight inflation, which is running at a 16-year high, in order to put downward pressure on interest rates. One of the ways to fight inflation is to have a significant budget surplus, which we have—as I have indicated—of some $22 billion. A very strong surplus is necessary for Australia if we are to fight inflation, and that is inflation we inherited from the Liberal-National Party coalition opposite when they were in government. There is greater pressure because of a range of global factors. We have seen the impact of the US subprime crisis and also of world oil prices. We know that the decision by the Liberal-National Party opposition to cause irresponsible delays to key budget measures in a range of legislation in the Senate will mean that, by the time we come back in about eight weeks, we will have lost approximately $284 million.

Jacinta Collins (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Senator Jacinta Collins interjecting—

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

Yes, as my colleague Senator Collins says, it is economic vandalism at its worst. But we have had another series of pronouncements from the Liberal-National Party opposition which pose an even greater threat to the budget surplus. We know that, last month, the interim opposition leader, Dr Nelson, announced a 5c cut in excise on petrol. Last week, we had the member for Aston, Mr Pearce, doubling it to 10c. In the last news cycle, we had the leader of the National Party, Mr Truss, quadrupling it—Mr Truss proposed to quadruple the cut in petrol tax to 20c. So they announced the policy some five weeks ago, then doubled it last week and then quadrupled it. But the problem is that they have never costed it. What would be the cost of these continual bids of the cut to fuel taxes? If we look at the original announcement by the interim Leader of the Opposition, Dr Nelson, the 5c would cost $1.8 billion, or some $7.2 billion—

Rod Kemp (Victoria, Liberal Party) Share this | Link to this | Hansard source

Gosh!

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

Senator Kemp says ‘gosh’. It comes as a shock. It will come as a real shock for the Australian people if they see the surplus eroded to this extent and upward pressure put on inflation and interest rates. The cost of the proposal for a 10c cut put forward by the member for Aston, Mr Pearce, is $3.6 billion a year. The cost of the proposed 20c cut put forward by the Leader of the National Party, Mr Truss, is $7.2 billion a year to the surplus or a total of $28.8 billion. But the National Party, who are the doormats of the coalition, know they could never implement it because the Liberal Party would never let them implement it. They are just squashed by the Liberal Party. Then we have the Deputy Leader of the Opposition, Ms Bishop, saying that the cut to the excise should be at least 5c. So presumably she wants it somewhere between 5c and 20c. What we have had in the last five weeks are five different proposals—five different, uncosted proposals from an irresponsible and divided Liberal-National coalition about different fuel tax proposals that will erode the budget surplus, put upward pressure on inflation and put upward pressure on interest rates. It is irresponsible and they should get their act straight. Which petrol tax policy do they want? They have got five to pick from. For goodness sake, make up your minds.

Alan Ferguson (President) Share this | Link to this | Hansard source

Senator Sherry, I remind you that you should refer to people in the other place by their proper titles.